More information on rules needed from state, Del Mar fair board says

The Del Mar Fair Board is asking state officials to provide more information about the rules regarding buy-backs of employee leave, in the wake of a state audit that said such buy-backs for fairgrounds employees were improper.

At its monthly meeting on Tuesday, Dec. 13, the board voted unanimously to send a letter to Ron Shackleford, audit chief for the California Department of Food and Agriculture, the agency that issued the audit report last month.

The report noted that the district allowed management and rank-and-file workers to cash out nearly $600,000 worth of leave time between 2005 and the beginning of 2011, which it said was a violation of state personnel rules.

The state-owned fairgrounds is operated by the 22nd District Agricultural Association, which in turn is overseen by a board of directors whose members are appointed by the governor. The district suspended the leave buy-back program earlier this year at the direction of board president Adam Day, after the state’s concerns surfaced.

Fair board members David Watson, David Lizerbram and Tom Chino met last week to discuss the state audit report, and voted to have fairgrounds staff draft the letter.

“The directors have full intention of complying with all laws and regulations applicable to the 22nd DAA. However, as many questions exist regarding the oversight of the district your efforts to respond to these questions are important to our understanding of the policies, rules and laws governing the 22nd DAA,” the letter concludes.

At the fair board meeting on Tuesday, Watson said the state’s report faulted the district’s actions in broad terms, but did not cite the specific regulations or laws that had been violated.

“I want to hear definitively, either from Food and Agriculture or the Attorney General’s office, what the rules are,” Watson said.

The audit report also called on the district to direct its employees to repay the money they received under the district’s leave buy-back program.

But Watson said it doesn’t appear the district has the authority to ask for the money back. Its only recourse to recoup the costs would be to sue the employees, he said.

In their official response to the state audit report, district officials said the payments were made due to financial hardships suffered by employees, only after it was determined that the employees had sufficient leave balances on the books.

In other business, the board discussed the apparent overcharging of the city of Del Mar for the use of fairgrounds property for a city fire station.

The city has been overcharged $85,000 for the use of the property because of an error in the calculation of the annual lease payment, wrote interim Del Mar city manager Mark Ochenduszko in a Dec. 5 letter to Tim Fennell, fairgrounds CEO and general manager.

For example, the current year’s payment should be $68,000, not the $98,000 called for by the lease formula, Ochenduszko wrote.

To remedy the situation, Ochenduszko said the city should be allowed to skip its lease payment for next year, which would leave a balance of $16,000 owed to the city.

The city is also requesting that it be allowed to return to the previous lease rate of $1 per year, which was the charge before the current lease was instituted.

Ochenduszko said the presence of the fire station provides a great benefit for the fairgrounds, which generates the most calls of any property in the city.

Fennell said at the meeting that the lease was negotiated between the California Department of General Services and the city of Del Mar. He conceded that it appears city officials are correct about the payment calculations.

“I don’t believe the calculations have been done correctly,” he said.

Fennell said he plans to bring an item to the board at its meeting in January to resolve the issue with the city. He also said he supports Del Mar’s request to go back to a $1 a year charge for use of the fire station property.

Director David Watson said the city needs to understand that it’s up to the Department of General Services to modify the lease.

“We have to become the landlord again before we can fix the problem,” he said. “We’re not the final decision-maker.”